This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

EU funding for up to three low carbon energy projects in the UK came a step closer today.

The Government has submitted 12 applications from UK projects to the European Investment Bank (EIB) for consideration in the next round of the EU’s New Entrant Reserve (NER) scheme - a fund worth around EUR4.5 billion to support carbon capture and storage (CCS) and innovative renewable projects across the European Union. Up to three projects may be supported per Member State.

Energy Minister Charles Hendry said:

“I am very encouraged by the strength and breadth of the UK applications for this round of NER funding, with all the projects received by DECC meeting the eligibility criteria.

“They demonstrate that the UK is at the cutting edge of low carbon energy development, ranging from CCS to wave, tidal and offshore wind.

“Taking forward these sorts of technologies will be crucial to our move to a low carbon economy, providing green jobs as well as helping us lower emissions and increase energy security.”

Of the 12 applications submitted to the EIB ahead of the 9 May deadline, seven are for CCS projects and five for innovative renewable energy projects. Two CCS applications were withdrawn voluntarily by the Project Sponsors.

The EIB will now spend nine months performing ‘due diligence’ on the applications submitted to it, checking their financial and technical deliverability. After this the European Commission will verify the eligibility criteria assessment and re-confirm with Member States the public funding contribution for Recommended Projects, before making its Award Decisions.

The seven CCS applications are:

Alstom Limited Consortium: oxyfuel new supercritical coal-fired power station on Drax site in North Yorkshire;

C.GEN: new integrated gasification combined cycle (IGCC) power station (pre-combustion with CCS on the coal-feed) in Killingholme, Yorkshire;

Peel Energy CCS Ltd: post-combustion amine capture on new supercritical coal-fired power station in Ayrshire, Scotland;

Don Valley Power Project (formerly known as the Hatfield Project): new IGCC power station in Stainforth, Yorkshire;

A consortium led by Progressive Energy Ltd; pre-combustion coal gasification project in Teesside, North East England;

Scottish Power Generation Limited: post-combustion amine capture retrofitted to an existing subcritical coal-fired power station at Longannet, Scotland; and

SSE Generation Limited: post-combustion capture retrofitted to an existing CCGT power station at Peterhead, Scotland.

The Government is committed to continuing public sector investment in four CCS projects and aims to launch a selection process to identify projects for UK funding later this year.

The five innovative renewable applications are:

POWER (Pentland Orkney Wave Energy Resource) which will deploy Aquamarine Oyster and Pelamis wave energy converters off the coast of the Orkneys;

The NER is a financing instrument, whereby 300 million allowances under the EU Emissions Trading System are set aside and sold-off to provide funding for innovative renewable and CCS technologies. The European Commission is responsible for the overall implementation of the scheme, with strong roles for the European Investment Bank and Member States in the process. The sale of allowances could raise around €4.5bn (at a carbon price of €15 per allowance, just under today’s price). Successful projects will secure funding for up to 50% of their relevant costs over a 10 year period for CCS/5 years for innovative renewables and a maximum of 3 projects will receive funding in any Member State. Further information on the NER see: http://ec.europa.eu/clima/funding/ner300/index_en.htm